Simmons First National Q2 2025 Earnings Report

Simmons First National EPS Results

• Actual EPS: $0.44
• Consensus EPS: $0.40
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: $0.33

Simmons First National Revenue Results

• Actual Revenue: $214.18 million
• Expected Revenue: $217.21 million
• Beat/Miss: Missed by -$3.03 million
• YoY Revenue Growth: +8.60%

Simmons First National Announcement Details

• Quarter: Q2 2025
• Date: 7/17/2025
• Time: After Market Closes
• Conference Call Date: Friday, July 18, 2025
• Conference Call Time: 8:30AM ET

Simmons First National (NASDAQ:SFNC) operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

Simmons First National Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The bank's net interest margin (NIM) hit 3% ahead of schedule thanks to strong loan repricing and healthy production.
• Positive Sentiment: Management expects ongoing NIM expansion from fixed-to-variable rate loan repricing and deposit remixing, even as deposit repricing opportunities taper.
• Positive Sentiment: The loan pipeline and unfunded commitments remain elevated despite Q1 pull-forwards and agricultural seasonality, positioning the bank for funded growth.
• Positive Sentiment: Credit metrics are stable with low classified loans, nonperforming assets and past dues, indicating normalized credit quality.
• Positive Sentiment: Ongoing investments in talent and technology, supported by disciplined expense management, aim to boost capacity and efficiency.

Presentation

[Operator]

Good morning, and welcome to the Simmons First National Corporation Second Quarter twenty twenty five Earnings Conference Call and Webcast. All participants will be in listen only mode.

[Operator]

After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ed Billick, Director of Investor Relations. Please go ahead.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

Good morning, and welcome to Simmons First National Corporation's second quarter twenty twenty five earnings call.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

Joining me today are several members of our executive management team, including Chairman and CEO, George Macris President, Jay Brogdon CFO, Daniel Hobbs and Chief Operating Officer, Chris Van Steenberg. Today's call will be in a Q and A format. Before we begin, I would like to remind you that our second quarter earnings materials, including the earnings release and presentation deck, are available on our website at simmonsbank.com under the Investor Relations tab. During today's call, we will make forward looking statements about our future plans, goals, expectations, estimates, projections and outlook, including among others, our outlook regarding future economic conditions, interest rates, lending and deposit activity, credit quality, liquidity and net interest margin. These statements involve risks and uncertainties, and you should therefore not place undue reliance on any forward looking statement as actual results could differ materially from those expressed in or implied by the forward looking statements due to a variety of factors.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

Additional information concerning some of these factors is contained in our earnings release and investor presentation furnished with our Form eight ks yesterday and our Form 10 ks for the year ended 12/31/2024, including the risk factors contained in that Form 10 ks. These forward looking statements speak only as of the date they are made, and Simmons assumes no obligation to update or revise any forward looking statements or other information. Finally, in this presentation, we will discuss certain non GAAP financial metrics we believe provide useful information to investors. Additional disclosures regarding non GAAP metrics, including the reconciliations of these non GAAP metrics to GAAP, are contained in our earnings release and investor presentation, which are furnished as exhibits to the Form eight ks we filed yesterday with the SEC and are also available on the Investor Relations page of our website, simmonsbank.com. Operator, we're ready to begin the Q and A session.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

The first question comes from Woody Lay with KBW. Please go ahead.

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

Hey, good morning guys.

[Jay Brogdon, President at Simmons First National Corporation]

Hey, good morning Woody.

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

Good morning. Hey, I wanted to start on guidance. And just looking through the slide deck, I didn't see any guidance slide like that's been featured over the past couple of quarters.

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

So I was just curious if any of your expectations for 2025 have changed for the back half relative to where we sort of started the year?

[Jay Brogdon, President at Simmons First National Corporation]

Yes. Hey, Willie, appreciate the question. And I may just insert a reminder to you and everyone. Historically, we've really only provided guidance or outlook commentary in January each year. Given sort of uncertainties around tariffs, the outlook for growth, some of the nonrecurring items in our first quarter that put noise in the numbers.

[Jay Brogdon, President at Simmons First National Corporation]

We brought that back forward in our first quarter announcement. But I'd say, when you think about our outlook for our business, I think the trends in the quarter, this quarter sort of speak for themselves. We continue to be very, very pleased with the ongoing trends in our business. We have some performance targets that we've outlined with you and others before and we're very ambitious in those targets. And I think the acceleration in our performance improvement and pace of that improvement continues to exceed even our internal expectations.

[Jay Brogdon, President at Simmons First National Corporation]

So I'll just say with that in turn, we're pretty confident maybe as confident as ever about our ability to execute and execute toward achieving those target levels.

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

Yes, that's helpful. Yes, definitely. I mean, it looks like NII and expenses both be, so it would only be positive from here. Maybe looking at the NIM, you sort of hit the 3% level ahead of schedule and kind of jumped over that line. Do you think there's room to continue to see expansion from here?

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

And is there more juice to squeeze on the deposit base? Or would you expect deposit cost to be to sort of start stabilizing from here?

[Jay Brogdon, President at Simmons First National Corporation]

Yes. So let me just kind of describe again what we observed throughout the second quarter and we'll talk about it maybe both ways that you posed it there. As I think about we'll talk about the asset side and then the deposit or liability side. I think on the asset side, we continue to primarily be a repricing story in terms of the performance that you're seeing and the expansion in the NIM. And I think there's still a lot of opportunity for us from that repricing dynamic point of view, particularly on the lower rate fixed rate loan repricing that we have experienced over the past several quarters.

[Jay Brogdon, President at Simmons First National Corporation]

And again, we continue to expect that. The thing that maybe gets a little bit overlooked is our loan pipeline and production continues to be strong. The headwinds to overall growth are some elevated level of pay downs, permanent market financings that we see out there, but also just are sticking to our pricing discipline. And so we're very willing to see lower growth rate in loans as we are maintaining that discipline around credit as well as that discipline around pricing. And we think that that competitive market for loan pricing is one that's pretty high for what we're seeing in the industry right now.

[Jay Brogdon, President at Simmons First National Corporation]

And so, competition and loan pricing and our ability to sort of stick to our discipline is going to be a factor on the overall level of loan growth. But again, pipelines are strong and production is strong for us. So I think those factors come to play on the asset side of what's driving NII and NIM. On the flip side of the balance sheet, deposits is probably more primarily at this point a remixing story. And we're seeing really we saw it in the second quarter, very good continued trends in terms of remixing from higher cost deposits to lower cost deposits.

[Jay Brogdon, President at Simmons First National Corporation]

And there still is an element of a repricing story in there as well. But I think your question basically alluded to kind of how we feel about that repricing dynamic. I often say of late the air is kind of coming out of that balloon. Every day that goes by from the most recent Fed rate cut, there's less and less repricing opportunities. So we had some of that opportunity in the second quarter, particularly as we think about the kind of core customer base.

[Jay Brogdon, President at Simmons First National Corporation]

That's probably not as compelling. There's still maybe some opportunity there, but not as compelling as the reprice dynamic on the loan side of the balance sheet.

[Daniel Hobbs, CFO at Simmons First National Corporation]

Yes. And Woody, this is Daniel. I'll maybe put a couple of finer points on that. On the loan yield side, kind of that pricing and remixing story, If you think about we've talked about this before, but in that fixed rate book, our total book is about 46% fixed rate. Last quarter, it was 48.5.

[Daniel Hobbs, CFO at Simmons First National Corporation]

Those fixed rate loans continue to reprice every quarter at near a 100 basis excuse me, 200 basis point spread. That trend has been pretty consistent over the last couple of quarters. We would expect that trend to continue that plus or minus some basis points there, but we feel good that that's going to continue for a period of time. And then just the remixing of the portfolio, The production, we put on 75% variable production this quarter. Quarter before that, it was 80%.

[Daniel Hobbs, CFO at Simmons First National Corporation]

So you'll continue to see that remix towards variable. And the spread between the fixed matured and the variable repricing is around 175 points. So both of those, we feel like that's a positive tailwind for us that will continue. And to Jay's point, on the funding side, that's probably going to be tougher and tougher as we move from here. Just one point on that.

[Daniel Hobbs, CFO at Simmons First National Corporation]

If you look at the CD schedule in our IP, you'll see that quarter view of the rate of the CDs that are maturing over the next couple of quarters is coming down. So that's where some of that repricing opportunity begins to fade in the next couple of quarters. We do expect some level of repricing, but maybe not at the levels that we've seen historically.

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

That's really helpful. And then maybe just last for me. As you noted payoffs were a little bit of a headwind to growth this quarter. Just any expectation for the payoff outlook over the back half of the year?

[Jay Brogdon, President at Simmons First National Corporation]

We saw really elevated payoffs in Q1. Nothing that really exceeded our expectations in Q2. So I think it's just it's an environment where we're seeing good healthy pay downs particularly on the construction side and permanent market activity. So I don't see anything on the outlook that is that really changes our thoughts around our expectations from a pay down environment point of view. But I think over the next couple of quarters, we would expect something maybe consistent with the first half of the year, maybe not even at as high level as what we saw in the first half of the year from that perspective.

[Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)]

All right. Thanks for taking my questions.

[Daniel Hobbs, CFO at Simmons First National Corporation]

Thank you. The

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

next question comes from Gary Tenner with D. A. Davidson. Please go ahead.

[Gary Tenner, MD & Senior Research Analyst at D.A. Davidson]

Hey, good morning everybody. Good morning, Gary. I wanted to ask a follow-up on kind of the pipeline, I guess. And with it modestly lower than last quarter, but still well above where it was certainly a year ago and even at the end of twenty twenty four. I'm just curious about the dynamics kind of intra quarter in terms of, A, the pull through on the first quarter pipeline looks like it was pretty good.

[Gary Tenner, MD & Senior Research Analyst at D.A. Davidson]

Is the lower what would you attribute the lower pipeline to given where we are today versus three months ago?

[Jay Brogdon, President at Simmons First National Corporation]

Yes, Gary. This is something that I believe I alluded to in our first quarter call. And at that point, was probably more of a theory. At this point, I think it's something that more has proven itself out. And that is that we just we experienced some pull forward late in the first quarter.

[Jay Brogdon, President at Simmons First National Corporation]

Again, I go back to a comment I made earlier. I think some of the tariff and other threats that were coming into the line of sight late in the first quarter, we had some opportunities where those opportunities were a little further baked and there was some pretty significant pull forward in the first quarter as it related to those items. And so I think when I've I kind of almost adjust for that. Even when I look at the slide in the IP, there's probably a more normal absent that pull through, a more normal kind of view when you go from fourth quarter to first quarter to second quarter, if you imagine that acceleration of some of those opportunities. The other thing to keep in mind about our business is there is some seasonality and we're having a tremendous amount of success in the agri area.

[Jay Brogdon, President at Simmons First National Corporation]

And we've been doing that for over one hundred and twenty years and that's a sector that's not that has some headwinds to it for sure. We feel incredibly good about that industry from a credit perspective. We are very, very selective about how we think about that business. But it does have normal seasonality to it. And so you see some of that pipeline growth in the early parts of the year.

[Jay Brogdon, President at Simmons First National Corporation]

And I think that's a piece of what you're seeing in the pipeline trends as well.

[Gary Tenner, MD & Senior Research Analyst at D.A. Davidson]

Great. Appreciate the thoughts on that. And then, in terms of the comments about continuing to recruit and kinda open for business in terms of adding talent, which I don't know if you've said today, but you certainly have in the past, it seems like it's a very competitive environment for bringing on talent. I think in the past, flagged Nashville particularly as a market that it could be very competitive. What's the hiring environment look like right now?

[Gary Tenner, MD & Senior Research Analyst at D.A. Davidson]

And certainly, in Texas, there's been a lot of recent merger announcements. So wondering what your thoughts are around potential opportunities there.

[Jay Brogdon, President at Simmons First National Corporation]

Yes, Gary, really appreciate the question. Let me back up for a second and then kind of come back closer to the questions you're asking there. The first thing I want to say is, we're pretty proud of what we've been able to do from an expense discipline point of view over the last few years. Saw really, really good evidence of our continued progress there this quarter. And we don't think we're finished in terms of being able to do that.

[Jay Brogdon, President at Simmons First National Corporation]

Daniel would say we're never going be finished doing that. It's just that continuous improvement mindset. But at the same time, what I really want to underscore is we're making some significant investments in our business. And I would maybe broadly, at a tactical level, think about those investments as talent and technology. And really enabling the business through things like automation and things just that are driving both associate and customer experience, but really generating capacity in our business.

[Jay Brogdon, President at Simmons First National Corporation]

And we're able to free up that capacity and the savings from those investments. And a large part of the deployment of that is back into talent. And so we have been really pleased with kind of the upskilling, upgrading and attraction of talent as well as our sort of retention and investment in talent in our business. And so I'd say that the hiring environment has been very, very good. We feel like we've got a proven track record there at all levels of the business and in all areas of the business from the backside to the frontside and everywhere in between.

[Jay Brogdon, President at Simmons First National Corporation]

And then my maybe bottom line comment would be when we think about our footprint and we think about, to your point in your question, the sort of disruption that even this week is being announced, our expectation is that that disruption is nowhere near finished throughout our footprint. And we are very ambitious in pursuing a reputation in our marketplace of one where talent and customer opportunities from that dislocation, we're a great place, a great landing spot for that. And we're seeing success there. I think the environment is only getting better.

[Gary Tenner, MD & Senior Research Analyst at D.A. Davidson]

Thank you.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

The next question comes from Jordan Gent with Stephens. Please go ahead.

[Jordan Ghent, Senior Research Associate at Stephens Inc.]

Hey, good morning. How are you guys doing?

[Jay Brogdon, President at Simmons First National Corporation]

Good morning, Jordan.

[Jordan Ghent, Senior Research Associate at Stephens Inc.]

Good morning. I just had a kind of a quick question, kind of going back to the loan growth. So it looks like your unfunded commitments have shut a steady upward drive. And we kind of interpret this as loan growth going into the back half of the year, maybe even to 2026 is setting up pretty nicely?

[Jay Brogdon, President at Simmons First National Corporation]

Yes. I think that's exactly the way to think about that, Jordan. And I would just one comment that we haven't made, you actually see it borne out not in the pipeline and unfunded commitment chart, but you see it in the quarterly sort of loan growth mix. There are still elements of CRE growth that you've seen historically make up those unfunded commitments. But we are seeing success maybe at the most leading indicator in the pipeline of growing mix of C and I in our pipeline.

[Jay Brogdon, President at Simmons First National Corporation]

We saw commercial activity kind of stand out relative to commercial real estate in the quarter in terms of production and growth. And we think that some of the ability to build C and I relationships will also be a factor there as we think about unused lines and lines with opcos that we'll have out there. So I think all of that points towards success of some of our strategic priorities as well as the ability to have some funded growth as we look to the coming quarters.

[Jordan Ghent, Senior Research Associate at Stephens Inc.]

Perfect. And then maybe just kind of one follow-up. I'm talking about that CRE. Kind of looks like classifieds just ticked up a little bit this quarter. Is there any color you could provide on that?

[Jay Brogdon, President at Simmons First National Corporation]

Yeah. There's nothing that stands out. We looked at those metrics very, very closely. And really nothing that stands out in kind of non performers, classifieds, past dues, charge offs, all the metrics that we see are very indicative of all of our most recent quarter's trends. But for the two large credits we talked about last quarter, sort of the underlying credit picture still feels, I think, stable and normalizing would be still good words for how we think about credit.

[Jay Brogdon, President at Simmons First National Corporation]

And there's nothing that kind of stands out beyond that in our mind. And again, I go back to one of the numbers I focus on. Obviously, we look at what migrates in and out of NPLs, but we also pay a lot of attention to both classifieds and past dues and thinking of those as leading indicators and had very, very good trends in past dues on a linked quarter basis. And even just the aggregate number is a very low number for us in that category. So think I that helps kind of paint the picture overall how we think about credit.

[Jordan Ghent, Senior Research Associate at Stephens Inc.]

Okay, perfect. Thank you for taking my questions. Thanks, Joel.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

This concludes our question and answer session. I would like to turn the conference back over to George Macris for any closing remarks.

[George Makris, Chairman & CEO at Simmons First National]

Well, thank you very much for joining us this quarter. I want to reiterate one thing that Jay said earlier, and that has to do with our talent. We are extremely proud of our team whose discipline is demonstrated in our results. We have exceptional employee engagement, folks who can and want to do more. And it's our job to make sure that we give them the resources for them to be successful.

[George Makris, Chairman & CEO at Simmons First National]

So I just want to reiterate our position on talent acquisition and current talent that we have today. We're awfully encouraged by the momentum that we show going into the second half of the year. We're looking for continued profitability improvement going forward. I think that was clearly defined for you this morning by Daniel and Jay. So thank you very much for joining us this morning.

[George Makris, Chairman & CEO at Simmons First National]

Hope you have a great day and a great weekend.

[Ed Bilek, EVP & Director - Investor & Media Relations at Simmons First National]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Ed Bilek, EVP & Director - Investor & Media Relations
• Jay Brogdon, President
• Daniel Hobbs, CFO
• George Makris, Chairman & CEO

Analysts

• Woody Lay, Vice President at Keefe, Bruyette & Woods (KBW)
• Gary Tenner, MD & Senior Research Analyst at D.A. Davidson
• Jordan Ghent, Senior Research Associate at Stephens Inc.